London (CNN Business) There's no denying that the US economy is at a strange juncture that's left even top experts scratching their heads.
"If you're not a little confused about the economy, you're not paying attention," former White House economic adviser Jason Furman, who now teaches at Harvard, recently tweeted.
Consumers are extremely pessimistic, but they're spending more than they did last year, according to the latest retail sales data. The number of jobs is still growing at a healthy clip and unemployment is near record lows, but economic output is slowing sharply. In the first three months of the year, it contracted.
That's stoking debate among policymakers and investors about whether the United States is close to, or already in, a recession — and if it isn't, whether persistent anxiety about one could be enough to make it a reality, as nervous businesses and consumers start to pull back.
"I don't think we should be talking ourselves into a recession," US Commerce Secretary Gina Raimondo said earlier this month.
Two camps are starting to form. One is epitomized by the White House, which maintains that while the US economy is sliding into a lower gear, it's not experiencing a recession as we would typically define it.
"This is not an economy that's in recession," Treasury Secretary Janet Yellen said Sunday on "Meet the Press." "But we're in a period of transition in which growth is slowing."
Former US Treasury Secretary Larry Summers, in an interview with CNN's Fareed Zakaria, espoused a different view — this one focused not on what the data is currently showing, but on what's likely to happen next.
"I think there's a very high likelihood of recession," Summers said. "When we've been in this kind of situation before, recession has essentially always followed."
His concerns lie with the Herculean task facing the Federal Reserve. The central bank is rapidly tightening interest rates to throttle inflation, but risks fostering a sharp pullback in economic activity as it boosts borrowing costs.
While the Fed is hopeful it can engineer a so-called "soft landing," where inflation comes down without a recession, Summers is skeptical.
"When inflation has been high and unemployment has been low, soft landings represent a kind of triumph of hope over experience," he said.
The final word: One definition of a recession is when the economy experiences two consecutive quarters of negative gross domestic product. In the first three months of the year, output declined at an annual rate of 1.6%. That raises the stakes for Thursday's first look at GDP data for the second quarter.
The recession call that economists and policymakers watch for, however, comes from the National Bureau of Economic Research's Business Cycle Dating Committee, which defines a recession as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
"While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle," the White House said in a recent blog post.
Big picture: Don't expect the NBER to settle the back-and-forth any time soon. It waited until June 2020 to announce that the coronavirus-induced recession started the previous February — and that was faster than usual. That means the recession debate is likely to persist for many months, no matter what's revealed later this week.
In the meantime, business leaders are displaying increasing alarm. The latest Business Conditions Survey from the National Association for Business Economics released Monday found that 43% of respondents think a recession in the next 12 months is more likely than not. Just 13% held this position back in April.